Category: Week in Review

 

Option to Profit Week in ReviewJuly 28 – August 1,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
6 / 6	3	4	2  / 0	7  / 0	0

    

Weekly Up to Date Performance

July 28 – August 1, 2014

New purchases for the week beat the unadjusted S&P 500 by 1.4% and surpassed the adjusted index by 0.9% during the worst week in about two years.

While performing better than the market those new positions still lost ground for the week.

With lots of companies reporting earnings this week it was all overshadowed by other events that converged to do their damage.

New positions opened this week went 1.3% lower while the overall market was 2.7% lower on an unadjusted basis and 2.2% lower on an adjusted basis.

Existing positions again significantly out-performed the market for the week by a really unusually large 2.8%. If the week’s big gainer, First Family Stores 2 lots which were closed early in the week are removed from consideration, the out-performance was still a very high 1.3%.

Existing positions actually showed an overall gain of 0.2% for the week if Family Dollar Stores is included, as compared to the market loss of 2.7%. If Family Dollar Stores is removed then the existing positions fell 1.3% as compared to the market’s fall which was twice as large.

Performance of closed positions out-perform the S&P 500 performance by 1.7%. They were up 3.7% out-performing the market by 83.9%. 

This was not a very good week for the markets, with it all turning fairly suddenly on Thursday, most likely due to Argentine default news and word of increasing sanctions against Russia.

Add to that continuing turmoil in the Middle East, Ebola scares, worries of increasing interest rates and the fear of heights, you really had the makings for profit taking.

For those holding shares of either or both lots of Family Dollar Stores, the week started off nicely, as did new purchases.

But that changed pretty quickly.

Following an almost 400 point decline in the DJIA over the final two trading days I feel fortunate to have had any assignments, at all. Even the early assignment of Texas Instruments to grab its dividend turned out to be a good thing.

Somehow, there was also the opportunity to pull off a few rollovers and even some new covered positions on existing uncovered shares.

After the dust cleared the entire portfolio was lower, but owing to the good fortune of being able to make some of those additional trades, no where close to the decline that the market suffered.

While I was happy to have seen some assignments, rollovers and the new call sales, I would have liked to have rolled over even more and was disappointed by the number of positions that fell victim to the two day slide. However, it just didn’t seem very practical or rewarding to roll some of those positions over to the next or even following week, as the costs to have done so made me rather take my chances with some recovery early in the week and hopefully the ability to simply sell new calls.

While I hate to take losses in any given week, one of the early lessons I learned from reading Money Magazine about 30 years ago is that when they rated mutual funds one of the really key ratings, but which they said was under-estimated by most others, was how a fund performed in a down market. That’s the principal reason I look so closely at comparative performance for each position and cumulatively.

Money Magazine used their mathematical models to show that it was far easier for a portfolio, or a fund, to catch up if it trailed in an advancing market, but far more difficult if it trailed in a declining market.

Conceptually, that makes sense, particularly if you think in terms of what needs to be done in the event of a loss.

Imagine a loss of 20% versus one of 25%.

The 20% loss requires a gain of 25% to reach back to your starting point. However, that 25% loss needs a 33% gain to recover. Decreasing your loss makes it much easier to outperform.

Among the reasons I like volatility, which is now suddenly in everyone’s vocabulary, is that it tends to be associated with a down market. That actually becomes the most opportune time to pull away from the crowd and to position yourself for the next stage higher. That tends to be easier to do than you might think because the volatility, while depressing stock prices, happens to drive premiums higher and also makes it more lucrative to even rollover in the money positions.

Next week it’s anyone’s guess as to whether the market follows through with the weakness of the past few days.

But with some cash in reserve and the good luck of having had at least a couple of assignments to offset some of the new purchases this week, there may be some bargains to be had as trading begins.

If volatility shows itself in the premiums, there may be good reason to bypass the weekly expiration and go straight to the monthly contract, which is just 2 weeks away and also buy a little time for the market to perhaps repair itself, while we sit and get paid to wait.









 

 

 





 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:   BX, DOW, EBAY, IP, PFE, TXN

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  C, EBAY, GPS

Calls Rolled over, taking profits, into extended weekly cycle:  none

Calls Rolled over, taking profits, into the monthly cycle: CHK

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  BMY, GPS, HFC

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  BMY, KSS, TXN

Calls Expired:   BX, DOW, EBAY ($54.50), GM, IP, RIG ($43), RIG ($44)

Puts Assigned:  none

Stock positions Closed to take profits:  FDO, FDO

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: C (7/31 $0.01), PFE (7/29) $0.26

Ex-dividend Positions Next Week:  WLT (8/6 $0.01)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BX, C, CLF, COH, DOW, EBAY, FCX, GM, IP, JCP, LULU, MCP, MOS,  NEM, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



 

Option to Profit Week in ReviewJuly 21 – 25,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
3 / 3	0	6	6  / 0	5  / 0	0

    

Weekly Up to Date Performance

July 21 – 25, 2014

New purchases for the week beat the unadjusted S&P 500 by 1.4% and surpassed the adjusted index by 1.6%

With 150 of the S&P 500 reporting this week it could have been an exciting one, but instead the market just vacillated day in and day out, barely budging from its starting point, at least until today.

There was some excitement today, but it was the wrong kind, at least for most, even though it turned out fairly well for the overall portfolio.

There were only 3 new positions opened this week and they climbed 1.4% higher while the overall market was virtually unchanged on an unadjusted basis and 0.2% lower on an adjusted basis.

Existing positions significantly out-performed the market for the week by an unusually large 0.5%.

Performance of closed positions continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market by 70.8%. 

Last week, up until Friday, was looking as if it would cap off a disappointing week, particularly compared to the previous week when there was so much trading activity.

This week didn’t have too much trading going on as we headed into Friday, with only two new positions open and no new call contracts written, and only a couple of rollovers. When it was all done, despite having a large drop as the back drop, there were some more rollovers and a number of assignments helping to replenish cash at just the right time.

With the market being basically flat for the week it was actually fortuitous to reclaim some of that cash with the potential to plow it back in without having to deal with across the board higher prices as has been the case the past few weeks as Fridays have closed
higher.

It was even more fortuitous that with the large decline seen on Friday the walls didn’t come tumbling down and turning those assignments into expirations.

Instead, it ended up being another good week from a number of perspectives.

But first, the negatives:

There were 5 covered positions that expired without getting rolled over. While I expect that for DOH trades, such as in HFC where the premiums are usually pretty slim and you don’t want to cannibalize the gains through unnecessary commission and buyback expenses, with volatility so low it’s also sometimes difficult to justify the rollover of other positions, such as Lorillard.

Also, no new STO trades were made for the week. That means the idle are still idle. I prefer to see them all working. Otherwise, they’re just stocks.

Now, for the positives.

While only 3 new positions, and one of them just today, they at least performed well. As usual, when there are so few positions to consider, whether they did well or not, you have to ascribe most of that to luck. This time we were lucky.

The existing positions significantly outperformed the market. Most often that’s the case when being able to do lots of rollovers. This time around there were some of those, but there was also price appreciation relative to the overall market.

For me, the best news were the assignments. Actually the best news was the bottom line, but I’m trying not to sound crass.

With prices ending the day near their lows that opens the potential opportunity to have some cash to spend next week at levels other than new highs, especially if there’s some further weakness or even a flat market to open the week.

Next week begins with a moderate number of positions set to expire on Friday. However, that number is not so great that more couldn’t be added to that list, as well as considering the use of some expanded weekly offerings.

With a nice boost to cash reserves I’m also less reluctant to consider new positions, especially with some price drops today. Even with some mild upside to begin the week there still may be some relative bargains to consider.

Among them may even be positions, such as Dow Chemical and eBay, which were assigned today. I especially like seeing some assignments right near their strike prices begin the next week below those prices. It has been quite a while since that has been the case, but in a market that isn’t simply going straight higher, that’s actually a fairly common occurrence and is the source for the accumulation of returns.

For now, it just feels good to have dodged a potential bullet today. Sometimes that luck that I think is so important
is also about the timing of the market’s moves. For us the timing of a drop like today’s turned out to be very fortuitous, just as last Friday’s nice gains were perfectly timed.

Can’t remotely take credit for that sort of thing, but it’s occasionally nice to be on the right side of randomness.

 

 







 

 

 





 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:   BBY, GM, LVS

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  KSS, GPS, RIG, RIG

Calls Rolled over, taking profits, into extended weekly cycle:  EBAY (8/8)

Calls Rolled over, taking profits, into the monthly cycle:  DG

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  none

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  BBY, DOW, EBAY, HFC, JPM, LVS

Calls Expired:   FDO, FDO, GPS, HFC, LO

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: FAST (7/21 $0.25)

Ex-dividend Positions Next Week:  C (7/30 $0.01)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, FCX, FDO, GPS, HFC, JCP, LULU, MCP, MOS,  NEM, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



 

Option to Profit Week in ReviewJuly 14 – 18,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
3 / 3	3	11	1  / 0	0  / 0	0

    

Weekly Up to Date Performance

July 14 – 18, 2014

New purchases for the week beat the unadjusted S&P 500 by 0.5% and surpassed the adjusted index by 0.9%

The market was everywhere this past week, going nowhere, going lower and going higher. While doing that it did confirm its resilience, but really gave no clue of its further character.

The resilience tells me about being true to its past. I want to know about the future.

After a horrid day on Thursday, as a result of competing terrible international stories, the market made a very credible comeback, despite the fact that it is again faced with a weekend of uncertainty, when wiser men of ages past would have lightened their holdings.

New positions, again only a handful of them this week,  performed in a mediocre fashion until some recovery today. They managed to climb&nb
sp;1.1% higher while the overall market was  able to rescue itself from a weekly loss with today’s showing. The overall market ended 0.6% higher on an unadjusted basis and 0.2% higher on an adjusted basis.

Existing positions did well and outpaced the market, in part due to the ability and good luck of being able to roll so many positions over this week. They beat the market by 0.2%

With only one assignment this week performance of positions closed in 2014 didn’t change very much, but they continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market by  67.2%. 

Coming off of last week this one was looking as if it would be one of significant disappointment.

Last week had something for everyone and without the need to spend too much cash in getting there. The volume of rollovers and new call position trades more than made up for the lack of new positions being opened.

As they say when you bring your cash to the bank door deposit, no one really cares about the white powder on the bills.

That’s how I feel about the weekly income stream. I don’t really care how its generated, but if I could fantasize, it would be generated without the need to open new positions. I would love to just trade the same stocks over and over again and sometimes you can do just that, but it takes a market that isn’t going straight up.

This week there was very little trading to be done and very little to find positive in the way the market reacted during its trading. More than the mood was the reality that without trades there is no accumulation of income and securing of value from positions, which essentially are otherwise worthless unless sold at a profit or delivering dividends.

The expected reaction to the unexpected double helping of bad news on Thursday didn’t do anything to help put positions into good standing for rollovers or assignments. So it was really looking like a week with little to show for the passage of time, which we know as option sellers, has definite value.

But just as unexpected was the fall on Thursday, so too was the rise on Friday.

If you’re not a believer in serendipity, that’s alright, but the sequence of events worked out nicely, as long as you don’t think about the human tragedies.

After the unexpected happened on Thursday, I had very little expectation of being able to accomplish much with existing positions and was fully expecting a week with lots of expired and unassigned positions.

While I would have liked more assignments by the time the final closing bell rang on Friday, and if only I had a little faith that the rally would be sustained I would have allowed more assignments, somehow it  still all worked out.

So when it’s all said and done that leaves a fair number of positions set to expire next week and some available cash for some new purchases. There are worse problems to have, I suppose.

With the August 2014 cycle set to begin and already having so many expirations next week, there may be reason to consider expanded weekly options for any new positions, where they are available.

In an ideal world next week would be similar to the past one and this week.

It would be great to again get a nice number of rollovers, maybe even sell some new cover on uncovered positions and see some assignments, as well.

If the market stays steady or moves just mildly higher, that could be a good possibility.

If, however, it moves much lower, there may finally be a reason to consider going on a little bit of a spending spree, as its been a long time since we’ve done that sort of thing.

Still, I’d rather keep my money safe, as long as I could still find a way to generate some income to justify all of this.

Serendipity helps.



 

 





 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:   FAST, GPS, LO

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  HFC, LO, RIG, RIG

Calls Rolled over, taking profits, into extended weekly cycle:  BMY (8/1), C (8/1), CHK (8/1), CHK (8/8), WFM (8/8)

Calls Rolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle: FAST, LB

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  DOW (7/25), HFC (7/25), HFC (7/25)

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  BMY

Calls Expired:   none

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: CHK (7/14 $0.09)

Ex-dividend Positions Next Week:  FAST (7/23 $0.25)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, FCX, JCP, LULU, MCP, MOS,  NEM, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



 

Option to Profit Week in ReviewJune 30 – July 3,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
4 / 4	1	5	1  / 0	2  / 0	0

    

Weekly Up to Date Performance

June 30 – July 3, 2014 

New purchases for the week beat the unadjusted S&P 500 by 0.5% and surpassed the adjusted index by 0.6%

The market was on target to do nothing for this week until some unexpected words and better than expected data captured everyone’s attention.

Despite a week of really low voulme, or perhaps because of that really low volume, the market passed 17000 for the first time and then reasonablty decidedly added to that figure today, even as so many had already settled in for the long weekend in the Hamptons.

New positions, and there was still a minimal number of those climbed 1.8% higher while the overall market was up its own very healthy 1.3% on an unadjusted basis and 1.1% higher on an adjusted basis.

Existing positions were able to keep up
with the market despite its strong gains. I usually expect them to lag on market strength, but rollovers, dividends and additional option cover helped to equalize performance.

With only one assignment this week, and it again being Las Vegas Sands,  performance of positions closed in 2014 didn’t change very much, but they continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market by 69.8%. 

It’s a little difficult to characterize this week. It was so short and as has been the case lately, there really hadn’t been much newsworthy or market moving taking place.

The moves higher on the backs of Jenet Yellen’s message that lent further support of stocks over bonds and then the Non-farm payroll statistics reminds me of two weeks ago. Then too, it was a lackluster week until Janet Yellen’s Wednesday press conference, which changed everything.

But if you recall there was absolutely no follow through to the next week.

This week ends with a long, long weekend and so when trading begins on Monday, despite standing at even more new record highs, there’s a reasonable chance that the news and cheer of this week will be long forgotten or at least will not have much in the way of impact on anyone’s thinking.

While there was lots of excitement over the employment news, especially since previous months  were also revised higher, no one seemed to remember the GDP revision and the seeming disconnect between an economy slowing down on the services and production end of things, yet heating up on the emplotyment side of the equation.

The over-riding belief, nd it may finally be time to prepare for real expansion, is that the economy is improving.

Never mind that other measures of employment, that are also released along with the Employment Situation Report, such as the U-6 Report, which is sometimes referred to as the “real unemployment rate” is nearly double the more familiar U-3.

In other words, lots of people are still unable to contribute to economic expansion, yet the market is ignoring an aspect of reality that does have consequences.

Ignoring it may have its own consequences.

Still, it was a good week.

Certainly from the bottom line perspective, but it was also a decent week in terms of trading and generation of option premium, despite the ever lower moving volatility. It was also another nice week in which dividends kept piling on.

The one change of behavior that I see myself succumbing to was evident with shares of Kohls today and some other companies in recent weeks.

In the case of Kohls its shares dropped precipitously in the final 7 minutes of trading to go from about $53.06 to 52.95, with an expiring $53 option. I had been hoping that it would have joined Las Vegas Sands and I was also consiering re-purchasing shares next week, as this middle of the road company is a nice strategic position.

While I don’t want to make any trades in the final 30 minutes, so as to not catch anyone flat-footed and unable to execute a trade, this was also an example of not wanting to pay the premium to close the existing option, as well as incurring the transaction expense, while forward week volatility, and therefore, premium, is relatively low.

Sometimes, and certainly moreso lately, I’d rather take the chance of not being able to make the trade next week than getting into a trade where the net premium is quite a bit less than I would think is appealing, due to the added costs.

Otherwise, it was a good week for rollovers and at least a couple of positions gained new cover. There was a net drain on cash reserves, with four new positions opened and only one assigned, but at least it was a good week in which to put some money to work.

Next week has lots of expirations coming due. While I have funds available for new purchases the likelihood is that, where possible, I would look to the end of the option cycle, now just two weeks away, as the contract term.

The low volatiltiy, however, sometimes makes that hard to swallow, but uncharacteristically the cycle ending month is currently very sparsely populated, so next week may be a good time to fix that and diversify risk a little bit more.

For now, though, my only concern is that there’s a happy, health and safe July 4th holiday ahead for us all.







.



Still, there were more new records and one of those inexplicable triple digit moves that really had no beginning, but did have an end.

This was another one of those weeks that the entire market should have just taken a vacation.



 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  BMY, DG, HFC, WFM

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  BMY, DG, JPM, KSS

Calls Rolled over, taking profits, into extended weekly cycle:  EBAY (7/25)

Calls Rolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  PFE

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  LVS

Calls Expired:   HFC, KSS

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: BMY (7/1 $0.36), JPM (7/1 $0.40), WFM (7/1 $0.12)

Ex-dividend Positions Next Week:  GPS (7/7 $0.22), MA (7/7 $0.11), DRI (7/8 $0.55), FCX (7/11 $0.31)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, EBAY, FCX, HFC, JCP, KSS, LULU, MCP, MOS,  NEM, PFE, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



 

Option to Profit Week in ReviewJune 23 – 27,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
3 / 4	0	7	1  / 0	4  / 0	0

    

Weekly Up to Date Performance

June 23 – 27, 2014 

New purchases for the week beat the unadjusted S&P 500 by 0.4% and surpassed the adjusted index by 0.3%

The market did absolutely nothing for the week and may as well have extended its July 4th vacation and just stayed in the Hamptons all week long.

Another week of a minimal number of new positions saw them go 0.3% higher while the overall market was down 0.1 % on an unadjusted basis and 0.1% higher on an adjusted basis.

With only one assignment this week performance of positions closed in 2014 didn’t change very much and continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market by 69.8%. 

This was one of those weeks that the entire market should have just taken a vacation.

It was about as mediocre as you can get and so far the expression “Sell in May and go away” may turn out to be accurate for the first time in years.

The week was primed to start on an up note coming off of a week that had been buoyed by the Federal Reserve and that really had no forward looking headwinds other than its lofty height.

Maybe it’s the gravity that was the restraining force this week but the trading was more directionless than anything else, not really reflecting any inherent weakness or being shackled by any particular economic weakness or external threat.

Other than a series of government interventions that resulted in some significant sector movements there was absolutely nothing else of any importance this past week and given that next week is just a 3 1/2 day trading week, it’s not too likely that anything on the schedule will have much of an impact.

That may include the Emplotyment SItuation Report which is being released on a Thursday due to the Friday holiday. However, any indication that the revised GDP numbers may have more than just a relationship to bad weather could make the payroll report highly significant for the first time in a very long time, but I don’t think that will turn out to be the case.

Despite another incredible revision in the GDP, the employment numbers have been reasonably accurate and they ahve been fairly consistent, although you do have to wonder when that growth in the work force will translate into something readily observable in the retail marketplace.

But that’s next week.

This week was another in a string of disappointing weeks. With very little trading activity opening new positions, the back and forth of the market, with no real conviction left no opportunity to find new cover for uncovered positions.

The only positive that I can find from the week is the ability to rollover as many positions as we did, but even with that there were 4 new postions added to the uncovered list, as they expired today.

Lately, with the volatility so low there have been times that I would rather see the expiration thatnto take on the cost of closing out a position in the rollover process, because the forward week’s premiums are just so low compared to the expiring week’s premiums.

One such example was Pfizer. Despite some significant moves during the course of the week, up and down, its forward premium for next week and the week after were so low that the cost of rolling over became highly signicant, even if trading in volume.

The same was the case with Dow Chemical that fell in sympathy with DuPont, who surprised everyone with their reduced guidance at the market’s close on Thursday.

What you may have noticed is that most of the rollovers this week by passed the July 3rd expiration and we
nt to the July 11th. That means that with next week there is opportunity to still populate the July 3rd list of expirations, the following week or the monthly. However, even though next week is a very shortened week, there may be greater advantage to looking at July 3 expirations because they may have comparable premiums to those with longer time frames.

Bring back volatility and that will stop being the case.

Hopefully next week will be more definitive. Ultimately, when it comes to assessing a given week I don’t particularly care whether it is up or down, as long as it helps to drive lots of activity, because it’s all about milking the market and existing and new positions to generate as much additional money as possible. With weeks like this past one, even if the bottom line increases, there’s no particular glee if money can’t be skimmed from the assets without reducing them.

While I’m lazy, I want my stocks to work hard. This week they didn’t work very hard.

I may spend this weekend trying to think of an equivalent action to the ones taken by the guards in “Cool Hand Luke,” when one of the inmates didn’t give him a good day’s work.





 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  DOW, JPM, KSS

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  KSS

Calls Rolled over, taking profits, into extended weekly cycle:  BMY (7/11), EBAY (7/11), EBAY (7/11), GM (7/11), MA (7/11)

Calls Rolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  none

Put contracts expired: none

Put contract rolled over: BBBY (7/11)

Long term call contracts sold:  none

Calls Assigned:  LVS

Calls Expired:   C, EBAY, HFC, PFE

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: DOW (6/26 $0.37)

Ex-dividend Positions Next Week:  BMY (7/1 $0.36), JPM (7/1 $0.40), WFM (7/1 $0.12)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, EBAY, FCX, HFC, JCP, LULU, MCP, MOS,  NEM, PFE, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



 

Option to Profit Week in ReviewJune 16 – 20,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
3 / 3	4	3	11  / 0	1  / 0	1

    

Weekly Up to Date Performance

June 16 – 20, 2014 

New purchases for the week trailed the unadjusted S&P 500 by 0.2% and surpassed the adjusted index by the same 0.2%

The market finished higher for the 6th consecutive day, which is often a difficult situation to compete with, but it wasn’t one in which anyone was left in the dust. 

New positions were 1.2% higher while the overall market was up 1.3% on an unadjusted basis and 1.0% on an adjusted basis.

Existing positions lagged the S&P 500 by 0.4% for the week, with many positions having reached their strike levels, after having out-performed the market by 0.9% the prior week.

Performance of positions closed in 2014 continue to out-perform the S&P 500 performance by 1.4%. They were up 3.4% out-performing the market
by 69.7%. 

Lately I’ve found plenty of reason to be dis-satisfied with the process of looking at the week just passed.

I tend to dwell on those things that didn’t go as planned and usually gloss over the things that worked or did go as expected, or more accurately, hoped.

Typically, I try to remind myself that the process doesn’t really matter, it’s the bottom line each week, as well as the ability to put the portfolio to work and by doing so keeping me from having to work. I’ve grown accustomed to having positions function as my annuity and don’t even mind having to work  at it to make them keep doing so.

Sometimes, getting my hands on the premium and dividend cash makes me temporarily look the other way if the bottom line wasn’t as healthy as I would have liked, although then I remind myself that its performance shouldn’t be measured in a vacuum.

When doing that, I usually feel better, even though there are those frustrating individual positions that often don’t seem to be getting better.

This week I’m actually pretty happy.

It was another week of very few new positions being opened and I’m actually not thrilled about that, but now that it’s all said and done I can live with the lack of activity, as it did at least keep up with the overall market.

What I’m happy about is the number of assignments that occured, as that helped to meet one of my goals for the past few months, which was to decrease the total number of positions in the portfolio.

The assignments also helped to replenish the cash reserve that had been getting drained the past few weeks and to some degree was also responsible for a deliberate  decrease in purchase of new positions.

There was also the opportunity to sell some new cover for existing positions, as well as the chance to rollover a handful of positions.

Maybe best of all was seeing the assignment of Weyerhauser. I’ve been anxious to see that go for quite a while, but crazily enough, once it finishes its spin off of its housing and real estate unit, I may want to add it right back.

Go figure.

But really, most of all, it’s still the bottom line.

So for next week there’s cash in hand and already a number of positions with June 27th expiration dates, so the emphasis should be to look for diversifying those expirations by looking for some expanded weekly options.

With the volatility still being so low those expanded weekly options aren’t always very appealing, but perhaps combining them with dividends may work to get an ROI that has some reason to take the associated risk.

That’s what continues being the issue at hand as more and more record closes come and then get surpassed.

It seems that while the account grows, so too does risk.

Because of that I’m not entirely excited about re-investing too much of the significant piece that is being returned over the weekend as all of these positions are being assigned.

But as always also seems to be the case it’s hard to completely remove yourself from the equation or not take part of the activity.

So I expect another week or relatively slow personal trading trying to get a feel for whether to try and balance new positions with short term and longer term expirations in order to protect against any short term downward movement in markets.

That seems to be an unending objective, but for some reason feels more so to me, as this nice week has come to its end.

 







 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  LOW, LVS, MA

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  none

Calls Rolled over, taking profits, into extended weekly cycle:  HFC (7/3), LVS (7/3)

Calls Rolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle: LB

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  BMY, EBAY, HFC, PFE

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:  BX, CY, CY, FAST, GME, IP, LO, LOW, MET, RIG, WY

Calls Expired:   DRI

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: SBGI

Ex-dividend Positions: LVS (6/18 $0.50)

Ex-dividend Positions Next Week:  none

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, EBAY, FCX, HFC, JCP, LULU, MCP, MOS,  NEM, PBR , RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.



 

Option to Profit Week in ReviewJune 9 – 13,  2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
4 / 4	1	6	0  / 0	3  / 0	0

    

Weekly Up to Date Performance

June 9 – 13, 2014 

New purchases for the week beat the unadjusted S&P 500 by 2.2% and surpassed the adjusted index by 2.1%

The market finished lower for the first time in the past four weeks and that’s usually an invitation to out-perform.

New positions were 1.5% higher while the overall market was down 0.7% on an unadjusted basis. 

Existing positions out-performed the S&P 500 by 0.9% for the week.

Since there were no assignments this week, performance of positions closed in 2014 continue to out-perform the S&P 500 performance by 1.5%. They were up 3.3% out-performing the market by 89.6%. 

I’m not really certain how to characterize this week.

Ultimately, it’s always about the bottom line and the bottom line was better this week than last wek, but there’s also the path taken that has to be considered.

This week just didn’t have very much in terms of activity to get from Point A to Point B so to a large degree it’s a question of just being taken along for the market’s ride, which closed surprisingly strongly, given the real geo-political uncertainty that may accelearate over this weekend.

During the week there wasn’t the kind of opportunity to get new cover, as I had hoped, as we saw two consecutive triple digit losses for the week and no really strong days. All in all, it was a mediocre week, which itself wasn’t much of a surprise, since there was really little economic news delivered.

That may be different next week as we have both an FOMC release and a Chairman’s press conference, both coming just days before the monthly expiration.

For me, that’s always a reason for concern. At the moment it appears as if a fair number of positions are in line to be assigned or rolled over, but that can change with just an errant word or two.

Given that there were no assignments this week that immediately makes me less likely to eagerly spend down cash reserves in the coming week, particularly as tensions are increasing in Iraq.

So what was good about this week? The process wasn’t very good, but the outcome was acceptible.

It did get us one week closer to the monthly expiration and leaving only one more week for breath holding.

New purchases fared well as did existing purchases and of course, there were more dividend inflows.

With existing positions doing well and with a number currently being in the money that also means being in a better position to withstand market weakness, although it also means potentially benefitting less in the event of market strentgh next week.

From those persectives I might be happy as far as the way the week transpired, but I would have liked much more trading activity. In hindsight that’s always easy to say, especially those weeks when the new psotiions fare well, as they did this week.

On another positive note, although a very tiny one, volatility did creep up just a little but, but not really to the point that anyone would really notice much in terms of everyday boosts to option premiums. Still, any sustained and slow increase in volatility could be very helpful, not only in getting more in exchange for selling options, but more choices in the time frames used in those sales.

For next week I don’t expect too many new positions to be opened, although some of the weakness this week has made some positions more attractive. The weekend’s events in Iraq may have something to say about how widespread some of those “bargains” may become or may tell us whether there’s reasonable reason to believe that a near term floor to prices has been set or not.

Instead of thinking too much about new psoitions next week and spending down too much cash reserve, I’m hoping it will be a week of assignments, rollovers and most of all, newly covered positions.

That would cap off the month in a nice way, but first we have to get past the FOMC hurdle and the occasional mis-spoken word of phrase that can spook traders.



 







 

     

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):



New Positions Opened:  GPS, LO, LVS, RIG

Puts Closed in order to take profits:  none

Calls Rolled over, taking profits, into the next weekly cycle:  GME

Calls Rolled over, taking profits, into extended weekly cycle:  C (6/27), EBAY (6/27), FDO (7/11), FDO (7/11), GM (6/27)

Calls Rolled over, taking profits, into the monthly cycle:  none

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle:  none

New STO:  HFC

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold:  none

Calls Assigned:   none

Calls Expired:    EBAY, HFC, PFE

Puts Assigned:  none

Stock positions Closed to take profits:  none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: KSS (6/9 $0.39), FDO (6/11 $0.31), NEM (6/10 $0.025)

Ex-dividend Positions Next Week:  LVS (6/18 $0.50)

 

 

For the coming week the existing positions have lots that still require the sale of contracts:   AGQ, BMY, C, CLF, COH, EBAY, FCX, HFC, JCP, LULU, MCP, MOS,  NEM, PBR ,PFE, RIG, TGT, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)



* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.